KINGSTOWN, St. Vincent– The Unity Labour Party government has rejected the proposals by Opposition Leader Godwin Friday to help Vincentians cope with the rising cost of living.
In a national address last week, Friday outlined his New Democratic Party’s (NDP’s) suggestions for helping the country to cope with the increasing prices – reducing VAT from 16 percent to 13 percent, rescinding the increase in the Customs Service Charge, and capping the fuel surcharge on electricity.
However, Prime Minister Dr. Ralph Gonsalves said that would cost the Government over EC$120 million (US$44.4 million) in revenue and affect its ability to pay salaries.
He noted that during the 2020 election campaign, the NDP had promised to slash the VAT rate in half, which would result in a loss of about EC$96 million (US$35.5 million), and claimed the party subsequently “saw the absurdity of that.”
“So even now the situation is challenging with COVID and the volcano, they dropped reducing it by half — just by three percentage points, from 16 to 13,” Gonsalves said. “But that’s EC$36 million (US$13.3 million).”
The Prime Minister said that even more significant losses would be recorded if the Customs Service Charge proposal was accepted.
Responding to Friday’s call for the Government to increase support for lower-income families by expanding existing support programs, Gonsalves said: “Well, he hasn’t mentioned that we are the only country, the only Government that ever-borrowed money, $13 million, from the World Bank and give people [bank] cards. We widen the social safety net in every respect.”
Gonsalves noted that Friday also called for import duty concessions for the public transport industry. He said if the duty is halved, the Government will lose around EC$30 million (US$11.1 million).
He also noted that the Government gives 75 percent duty-free concessions for minibus operators who transport schoolchildren.
“I have to borrow money to fix the roads because what we collect for vehicles is not enough to fix the roads. But you still want to give more. What is the matter with these people? You think Vincentians are ignorant?” the Prime Minister said.
He stressed that the Government had to find EC$30 million (US$11.1 million monthly to pay public sector workers and could not afford the proposals the NDP had put forward.
“So, it’s between three to four months’ salary Friday wants to give away. He isn’t telling you how you got to make it up. So, you see teachers, civil servants, police, nurses, doctors, if the NDP in Government, at the end every month only some of you going get paid,” Gonsalves contended.
“They have any understanding of what Government is? They want to have chaos in the country, where civil servants will not be able to get their salaries by their fiscal measures?” he questioned.
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